Xunrui Communications Is an Upstart Maker of Inexpensive Smartphones for the Chinese

question 347

Multiple Choice

Xunrui Communications is an upstart maker of inexpensive smartphones for the Chinese market. Xunrui purchases the components for the items, which are then sent to small assembly factories in Shenzhen, located in southern China. These smartphones retail for about $65, significantly less than the $250 to $600 for smartphones marketed by Apple or Samsung, the top two marketers of these items. Xunrui Communications most likely is using which pricing strategy in this example?

• A)penetration pricing
• B)cost-plus pricing
• C)target ROI pricing
• D)above-market pricing
• E)skimming pricing

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Definitions:

One-tailed

Refers to a type of statistical test in which the alternative hypothesis specifies a direction of the expected difference or relationship.

Indirect Correlation

A negative correlation where the values of variables move in opposite directions.

Nondirectional Correlation

A type of correlation that measures the strength and direction of a relationship between two variables, without assuming which variable influences the other.

Unidirectional Correlation

A correlation where an increase in one variable is associated with an increase in another or a decrease in one is associated with a decrease in the other, without implying causation.